I beg to move,
That this House has considered the future funding of supported housing.
It is a pleasure to serve under your chairmanship, Mr Hollobone. The House was told by the new Secretary of State for Work and Pensions on 21 March 2016 that the Government
“have no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament two weeks ago, which we will now focus on implementing.”—[Official Report, 21 March 2016; Vol. 607, c. 1268.]
That assurance to the whole House was repeated the following day by the Chancellor of the Exchequer.
The purpose of this debate is to remind the Government of the consequences of imposing the local housing allowance on supported housing. The proposals will definitely be a further cut in welfare provision. The local housing allowance was introduced in order to cap the housing benefit given to private landlords. The cap is locally set, and it limits the amount of housing benefit to a figure based on the lowest 30% of the rental market in each local authority. In Newcastle upon Tyne, the city that I have the honour and privilege of representing in this place, it would mean a cap of £90 a week on housing benefit for a one-bedroom flat or £60 a week for a room in shared accommodation—£60 a week is the benefit offered to anyone under 35 years old who is single and has no dependants. It is a quirk of the system that supported housing in more prosperous boroughs is less badly hit by the measure because private sector rental levels, on which the calculation is based, are higher.
My right hon. Friend mentions prosperous boroughs, and the London Borough of Ealing would, on paper, count as one of them. Does he agree that it is a scandal that, even in my constituency, groups such as YMCA West London are being hit? One of my very early engagements as an MP was with my hon. Friend the Member for Ealing North (Stephen Pound). We went to look at YMCA West London’s refurbished hostel in south Ealing. After the summer Budget and the 1% cut in social rents, YMCA West London wrote to me and said that, because it had used all its cash reserves to refurbish the hostel on a business plan that assumed future rental levels, it was looking at staff cuts, service reductions or possible closure. Is that not a scandal?
I agree wholeheartedly with my hon. Friend. Perhaps I should have said “relatively prosperous.” The distinction will be clear to people in the north-east of England, but perhaps less so to her constituents. She raises another important point, which is the uncertainty hanging over the arrangements, and I will have more to say about that later.
Returning to the Government’s intention, the changes introduced in the autumn statement extended the cap into the social sector, in line with the provisions that already pertained in the private rented sector, which means that the rate paid to private renters on housing benefit will apply to the social sector, too. The measure will apply to new tenancy agreements signed after 1 April 2016, with the rate changing on 1 April 2018.
The right hon. Gentleman will know that, during the Report stage of the Welfare Reform and Work Act 2016, Members on both sides of the House encouraged Ministers to introduce the moratorium—the 12-month review—on these specific housing developments, which gives us, on a bipartisan basis, an opportunity to consider the work being undertaken by specialist housing providers and to try to find consensus to offset what were originally envisaged to be quite draconian changes.
I would like to find a consensual way through this, but maybe the Government should have thought about these matters before applying the measure to social housing. If they propose reform, they should think about what the reform should be and then introduce it, rather than introducing it in such a heavy-handed way and then saying, “Maybe we’ve gone too far. We had better have a review.” Like the hon. Gentleman, I would be fascinated to know what the review has come up with, because it is due about now. In fact, I think the Minister said it was due in March 2016.
My right hon. Friend is being generous with his time. Does he agree that the Government should have given due consideration to those people who suffer from mental illness and who will be affected by these “draconian” cuts, as the hon. Member for Peterborough (Mr Jackson) put it, to their housing benefit?
I certainly agree, and I intend to go through a range of people who are affected by the measure. When I was researching for this debate, I found that the list was far more extensive than I originally thought. The measure is projected to save the Exchequer £120 million in 2018-19, rising to £225 million by 2020-21. The Government have said that they will delay the imposition of the cap on supported housing for one year, and they are currently reviewing the application of the cut to such housing. They have said that the review will
“provide a foundation to support further decisions on protections for the supported housing sector in the long term.”
Perhaps the Minister will explain what that means and tell us when the review will report, because we are all interested.
The uncertainty is damaging enough. Supported housing is a type of social housing that includes a care element. It allows those who cannot live by themselves without care to live independently with a support worker and with dignity in a place to call their own. Due to the very nature of supported housing—including a care element—it is more expensive, and thus a cap limiting weekly rent to as little as £60 will mean that much of it is unaffordable. In essence, the most vulnerable, those who need care in order to live, will have their housing benefit cut. Supported housing for vulnerable adults and young people who need help to live independently can include housing for people with learning difficulties, social problems or mental health issues; vulnerable older people; women fleeing violence; people with physical disabilities; and servicemen and women. Surely if anyone is especially entitled to our consideration, support and affection, it must be those groups, and particularly ex-service personnel.
The Byker Community Trust in my constituency runs supported housing for veterans of the armed forces. The trust has low rents because it is a relatively young stock transfer organisation. Comparatively, it is one of the cheapest in Newcastle upon Tyne. However, the rents for veterans will significantly exceed the local housing allowance cap. Veterans in supported housing in the Byker Community Trust will have a shortfall of £32.50 a week if they are over 35 years old. If they are under 35 years old, they will need to find an extra £63.48 a week to cover the cost. The Army values the provision, and indeed it has supported its introduction. One veteran told me that
“the army does everything for you when you are service personnel, adjusting to civilian life was difficult.”
He did not know what he would do without the project.
Supported housing includes housing for young single people who are at risk of sleeping rough, begging in the streets and spending what little money they have on legal highs. Uncared for, they need the constructive intervention of adults. Supported housing is an appropriate and proportionate way of responding to those problems, which are covered by a range of Government agencies.
Tyne Housing in my constituency has a site in Newcastle East at St Silas’s church. It provides supported housing and day services for vulnerable and isolated people. The housing is provided mainly through single-person flats and supportive workshops to help people lead a full and fulfilling life. That specialist housing project is exactly the type of provision that will be hit by the cap. The project’s leaders tell me that as a result of the Government’s changes, the project will have to close; it is as straightforward as that. Those affected are vulnerable and need our help, but if the Government proceed with the cap as proposed, they will fail those people. The local cap on funding for supported housing could have huge repercussions. The National Housing Federation has released figures estimating that 82,000 specialist homes will be threatened with closure, just under half of all supported housing in England. That will leave an estimated 50,000 vulnerable tenants who are unable to work without support.
The uncertainty is having an immediate impact. Services coming up for re-tender are at risk of closure, irrespective of the outcome of the review, simply because the providers cannot make a potentially unfunded commitment in respect of what might happen beyond 2018. The National Housing Federation has said that 2,400 planned new homes have already been scrapped as a result of the cap, and almost a quarter of supported housing providers, 24%, told the NHF that all their supported and sheltered units are at risk of becoming unviable and closing if the cap is implemented.
The cut will cause serious problems for providers in Newcastle and the north-east. Changing Lives Housing Trust is a national registered charity based in Newcastle that provides specialist support services throughout England to thousands of vulnerable people and their families. It provides support to homeless people, recovering addicts and ex-offenders, as well as providing specialist women’s and family services. The charity has estimated that the cap will lead to an annual shortfall of £2 million in funding for its services.
Isos Housing, which manages more than 17,000 homes across the north-east, calculates that 700 of its 900 supported housing tenants will be affected by the cut, losing an average of £80 a week. Home Group, another major provider in the north-east, estimates that 223 services covering some 3,945 beds will become unviable if the proposals are implemented.
The Government seem to be aware of the problem, hence the review, but I hope that this debate will prove a useful chance and platform for the Minister to tell us where the policy is going. The Government policy, as announced, will have a number of unintended consequences. The most obvious question is where will those vulnerable people go when supported housing is no longer affordable? What alternatives do they face? The likelihood of suffering and exploitation is obvious. The immediate concern is a rise in homelessness and its consequences. Some people may end up with the police or in national health service emergency provision, such as accident and emergency; others may find themselves exploited without housing support or accommodated in unsuitable housing.
Home Group’s average accommodation costs for someone with learning disabilities are £13,500 per bed space per year, or £260 a week. In its challenging behaviour and learning disabilities costing statement the National Institute for Health and Care Excellence estimates that NHS inpatient care for people with learning disabilities costs between £96,000 and £197,000 per person per year. The average hospital day bed costs about £300. By comparison, a night in a prison cell costs £418, and an ambulance call-out averages about £250. The difference in cost between supported housing and NHS care is huge. Ultimately, the taxpayer is better off with supported housing.
Home Group estimates from the Department of Work and Pensions’ own figures that the cost implications of losing supported housing could be as much as £2.5 billion. I ask the House to consider that—a cost of £2.5 billion in unintended consequences, spread across different Departments but falling pretty heavily on the Department of Health, for an attempted saving of £225 million. We ought to pause and rethink. Supported housing is money well spent and proportionate to the range of problems that it addresses. It is a relatively small expense that, if cut, could cause great misery to the most vulnerable and great cost to the taxpayer. The answer is to exempt supported housing from the proposed cuts.
I have two extra points to raise with the Minister. The Government should say what their proposals are for the future of supported housing under universal credit. I hope that the answer is something better than, “We are giving local authorities a small grant to try to do what they can for themselves, but they’ll have the power to do it themselves”—not the money, of course; just the responsibility. I hope that he can say something more comforting than that. Perhaps he will be able to tell us what funding structures will exist to fund supported housing when housing benefit is abolished under the universal credit structures proposed for 2018. Can he update us on that?
If the Minister cannot give us the full policy, can he at least update us on the findings from the review, which we are all expecting and which he promised in March? The promise has now mulched into “in the spring”, but in any event the review is imminent. Perhaps now would be a good time for him to tell us how he intends to avoid the hardship that I have outlined, and how he feels he can best give assurance to an important sector desperately in need of it.
Several hon. Members rose—
This debate is to finish at 5.30, and it is clearly well supported. The recommended time limits for Front-Bench speeches are five minutes for the Scottish National party, five minutes for the Labour party and 10 minutes for the Minister, and then Mr Nicholas Brown will have a couple of minutes at the end to sum up. Eight people are standing, and there are 18 minutes until I call the SNP Front-Bench spokesman, so I am afraid you must limit yourselves to two and a half minutes each so that everyone can get in. If people intervene on speeches, I will not be able to accommodate everybody. I will impose a time limit of two and a half minutes. I know it is not very long, but I hope everyone can get in.
I will do my best, Mr Hollobone. I am grateful to the right hon. Member for Newcastle upon Tyne East (Mr Brown) for securing this debate, which comes at an opportune time, given that the Government’s review is taking place. I urge the Government, in carrying out the review, to start with a clean piece of paper. As we heard from the right hon. Gentleman, a lot of vulnerable people will be affected by the changes. I will not go through them in detail, but the feedback that I am receiving in Suffolk is that the recent changes to and restrictions on rental income for social housing providers and the changes in capital funding for adult social care are having a direct negative effect on capital investment available for supported housing schemes, leading to fewer and less innovative projects.
In moving forward with the review, my plea to the Government would be to break out of departmental silos. This is not just an issue for the Department for Communities and Local Government and the Department for Work and Pensions; it is not just about housing and benefits. It is an issue for the Department of Health, as it concerns physical and mental healthcare, and it is a job for the Department for Business, Innovation and Skills, as it concerns preparing vulnerable people for the workplace.
It is also necessary to involve councils, which deliver these policies at the coalface, whether as housing authorities or social care providers. It is important to listen to housing associations and charities that are carrying out innovative projects that change people’s lives and that in the long term are sustainable financially. These include Give Us A Chance and the Papworth Trust, and—more locally in Suffolk—Saffron Housing Trust, Orwell Housing Association, Stonham Housing Association, and Access Community Trust, which has done great work in Lowestoft for many years.
As supported housing involves more than just housing and has wider benefits outside the walls of DWP and DCLG, we need to consider a wider range of funding sources from other Departments. Perhaps devolution provides a means of securing these funds. Also, councils should be encouraged to pursue an open-book approach to negotiations rather than fixed-price tendering. That way, tailored, bespoke and long-term solutions can be provided to meet specific local challenges and needs. In summary, let us start with a clean piece of paper, work collaboratively and think long-term.
Welcome as the delay in introducing the housing benefit cuts for those in supported accommodation is, it is simply not enough merely to delay them. In my opinion, the UK Government must exempt supported housing tenants altogether from these devastating changes or find an alternative funding model. That is because change to housing benefit can undermine the ability of such tenants to pay their rent, thereby putting their home at risk and threatening both their physical and mental wellbeing, as well as posing a genuine threat to the financial sustainability of housing associations.
Such changes could have a devastating impact on the future provision of refuge accommodation in Scotland, where all refuge accommodation is in the ownership of either housing associations or local authorities. The Scottish Federation of Housing Associations has identified that associations in Scotland could lose between £5 million and £14 million per year, which would be completely unsustainable.
From within the industry, we have already had a range of apocalyptic warnings from informed and knowledgeable service providers. A survey conducted by Scottish Women's Aid found that,
“in a rural area, introducing a cap linked to the LHA rate”—
that is, the local housing allowance rate—
“would result in an annual loss of £5,800 for a 2 bedroom refuge flat. In an urban area, the annual loss for a 1 bedroom refuge flat would be £7,100, and in another semi-urban area the loss on a 3 bedroom refuge would be £11,600 per year.”
David Orr, the chief executive of the National Housing Federation, said in December:
“The impact of the LHA cap on the amount of Housing Benefit payable for supported housing will be stark and make it extremely difficult for any housing associations to develop new supported housing. Without existing levels of benefit being available, providers across the country will be forced to close schemes.”
That is echoed by Andrew Redfern, chief executive of Framework, a specialist housing association, who has said:
“It would mean the end of supported housing. All our schemes would close, and I think all others would as well.”
Also, an Inside Housing article from 21 January laid bare the impact of capping housing benefit, identifying that only 5% of schemes could survive, which is a shocking figure.
In conclusion, the LHA bears no resemblance to the actual costs incurred by supported accommodation providers and if, as a result, such housing options became financially unviable, vulnerable tenants might be forced into potentially costlier alternatives, such as institutional care, funding increased hospital stays, the higher cost of private landlord housing and—in the worst case—the higher costs of imprisonment. This move must surely be the very definition of fiscal irresponsibility.
I am indebted to the right hon. Member for Newcastle upon Tyne East (Mr Brown) for bringing this debate to Westminster Hall.
I was first alerted to this issue not when I had the honour to serve on the Housing and Planning Bill Committee but via one of my local housing associations. Alan Lewin, the chief executive of Axiom Housing Association, talked about the viability of supported housing schemes in low-cost areas and how the reduction in rent was very likely to reduce their viability permanently, not only in places such as Fenland and around Peterborough but throughout the country.
I will briefly make a plea to the Minister by reiterating the comments of my hon. Friend the Member for Waveney (Peter Aldous) that this is a cross-departmental issue and it goes to the heart of the Treasury. If the Treasury really wants to restrict and reduce housing benefit payments and the cost of acute district hospital care, it has to think long-term and holistically, and put in place legal and financial inducements to providers across the piece to provide extra care and supported housing. So it is not only the Department for Communities and Local Government and the Department for Work and Pensions that are involved, but the Treasury. As I say, we have to think holistically.
I will also make the plea that this is a regional issue. Sometimes with our housing policy, we have been inclined to be very London-centric. There is a regional issue here, in terms of the affordability not only of general needs housing but of specific supported housing.
The mark of a civilised society is how it treats people who are voiceless, who do not have representatives and who are vulnerable, and it is important that we bear that in mind. All Governments make mistakes and all Governments are subject to the law of unintended consequences; that is very important to consider.
In this moratorium review, we must also take it into account that the costs of support for the particular individuals who we are discussing today are significantly higher than the costs of general needs housing. That is also a very important point.
Let us take in all the evidence from across the country, and let us have a proper regional and holistic approach, which must include a cost-benefit analysis of the costs that fall on things such as the criminal justice system and the NHS. Let us have a proper review and let us try to work together across party divides, so that at the end of the review we can have a consensus on looking after the needs of the people who really need our help—the most vulnerable.
I thank my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) for securing this debate. I am only sorry that we do not have more time for it. Lots of Opposition Members, particularly Labour Members, feel very strongly about this situation and there are some very important issues involved.
I will also raise a local issue. I thank the North Star Housing Group and its chief executive, Angela Lockwood. That organisation provides specialist housing, including specialist supported housing, within my constituency and across the north-east region. I wanted to highlight a number of examples, but I also want to point out the nature of the problem.
A recent survey by Inside Housing revealed that 95% of supported housing providers have stated they would have to close at least some of their schemes, and a quarter of those providers said they would have to close all their supported housing. That is particularly worrying for County Durham. There are 6,450 supported and specialist units across the county that support a range of people. As my right hon. Friend has already outlined, these people are very vulnerable, including people with mental, physical and learning disabilities; the elderly; people recovering from substance abuse; people trying to rebuild their lives; and women fleeing domestic violence, for whom supported accommodation could save their lives.
The very short-term financial savings that the Government hope to achieve will quickly evaporate, because supported and specialist housing helps to reduce crime and eases pressure on already overstretched health and social care services. If the Minister thinks that this measure will save money, he needs to reflect on the findings of the Homes and Communities Agency, which found that investing in supported housing saves the taxpayer £640 million annually. As other Members have pointed out, if there was a little forethought and cross-departmental co-operation between various Departments, the value of supported housing could be better appreciated.
We will not address the housing crisis by penalising the vulnerable or by cutting funding for supported and specialist housing. The best way out of the crisis is to build more properties of all types and tenures, not just starter homes at costs that are out of reach for many people, and to exempt specialist supported housing from the terms of this cap.
It is a pleasure to serve under your chairmanship, Mr Hollobone, and I thank my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) for securing this debate.
I will briefly talk about a specific issue regarding York. We have got a double jeopardy, because the broad market rental area is not specific enough and covers a much broader area than York. Consequently, we are already at a disadvantage with regard to the value of the local housing allowance. These changes that we are discussing today will make things even harder for the housing associations in York. So I ask the Minister to look specifically at the issues regarding York and the impact that they will have.
I have met with York Housing Association to talk about the impact the changes will have, not just, as we have heard, on the social benefit that investment in supported housing brings but on the hard figures—the economics. York Housing Association has 364 tenants and a rental income of £2.7 million, but with the local housing allowance cap its income is estimated to drop to between £670,000 and £880,000. The association supports really successful projects, which are held in high regard across the nation. The Arc Light Centre and its homelessness project has a more than 70% success rate of people going on to live independent lives and not returning to the streets. With such excellence within the housing schemes we do not want the cut, which will put masses of pressure and costs on to things such as the emergency services and accident and emergency, and put people back on our streets, which is the last thing we want.
I have also visited Seventh Avenue, where we have a supported housing scheme for people with severe physical and learning difficulties. If the changes go ahead, the scheme will not be able to run. It will see an annual shortfall of £18,830, which will mean losing a support worker who is absolutely vital to providing its services for people who are incredibly vulnerable and need the support of the state for their survival, let alone for providing quality of life. I have to assure the Minister that the scheme provides excellent quality for the people who live there.
In my remaining seconds, I urge the Minister to look at the evidence and listen again to the housing associations. They are the experts in the field and we need evidence-based policy in taking the situation forward.
The reduction of social housing rents by 1% and the cap on housing benefit on social housing tenancies will have a profound impact on providers, reducing their revenue stream. The housing associations have stressed to the Government that the consequences of the changes could be dramatic. They are likely not only to be forced to shelve developments currently under way but to close existing schemes, at a time when the need for supported housing for the elderly is growing sharply. We are seeing a reduction in both the revenue of the housing associations that provide social housing and the funds being made available to the vulnerable people who need to live in supported housing. One has to ask whether the Government want the state to continue to provide support for social housing or not. Based on the proposals thus far, I suspect not.
Magenta Living, which operates in my constituency, has said that tenants on benefits will have to find an extra £25 per week out of their other benefits. In future, vulnerable prospective tenants and homeless singles are likely to be unable to afford social housing. Where does the Minister think those people should live? Magenta also points out that the problem is particularly difficult in the case of acute care, where there is a need for significant communal space for assisted bathing, treatment rooms and so forth. Magenta has told me that the Government are undermining their own drive to increase the volume and scope of older persons’ housing at a time when social care is at crisis point.
Specialist housing schemes are really important for the most vulnerable people in our society, and it is on that provision that we should judge the civilised nature of our society. I ask the Government to think again, to find their point of compassion and to show support for supported housing.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) on securing this important debate.
There is an enormous breadth of supported housing. In my constituency we have a brilliant foyer, which supports young people, sheltered accommodation for blind and partially sighted residents, care homes for people with physical disabilities and sensory impairment, homes for people with learning disabilities, refuges for victims of domestic abuse, accommodation that supports young and vulnerable new mothers and their babies, many sheltered schemes and care homes for older residents, and supported housing for people with mental health needs. I have visited many of those facilities and have never failed to be moved by the difference to individual lives that is made by providing appropriate care and compassionate support, enabling people who have a wide range of needs to live the best, most independent and most fulfilled lives possible and, in the case of refuges for victims and survivors of domestic abuse, enabling women and their children to move on and rebuild their lives in a safe place, away from the horrors they have escaped. Supported housing is a positive investment that saves the public sector money in the long term.
Yet the National Housing Federation estimates that across the country there is already a shortfall of more than 15,600 supported housing places. It is absolutely no exaggeration to say that the Government have entirely avoidably thrown the sector into turmoil by proposing to cap the local housing allowance and introducing an annual rent reduction of 1%.
Over the past two months, I have met with five housing associations that are active in my constituency and provide supported housing, and have been struck by how strong an impact the Government’s policies are having. All the associations said that they were planning to reduce their current provision, all of them had put new schemes on hold for the time being, and one of them was exiting supported housing provision altogether. Those are not isolated examples. As my right hon. Friend the Member for Newcastle upon Tyne East said, Inside Housing magazine recently reported that 95% of providers would be forced to wind up some schemes if the LHA cap were introduced. There is a particular risk to smaller providers, which often deliver the most specialist and innovative supported housing but are not able to cross-subsidise that with mainstream housing.
There is an urgent need for the Government to bring the uncertainty and turmoil to an end, confirm the removal of both the LHA cap and the reduction in rents for the supported housing sector, and work with the sector on a viable, sustainable plan to deliver the supported housing we need to meet the current shortfall and the future growth in demand. Supported housing is vital for equality, for quality of life and for the development of compassionate communities where everyone can live life to the full.
Much has been said about the importance of supported housing to our communities. St Mungo’s provides a number of supported housing schemes in Brent, especially for people with mental health and substance abuse difficulties. It also supplies supported housing for people who come out of prison and are in the in-between stage—the one-stop stage. Although I welcome the Government’s rethink, it is a shame that we have come to this point because many of those who were supplying supported housing services had already flagged up the issue. Undue stress has been put on the organisations, and worrying about whether they would be able to stay in their supported accommodation has done nothing to help people’s mental wellbeing. Gandhi once said that we would be judged by how we treat the weak and vulnerable in society.
If the LHA cap is applied to St Mungo’s tenants, it is estimated that the organisation will quickly face an annual shortfall across its supported housing services of about £8.8 million. It would not be able to sustain such a dramatic shortfall and, like many of the other organisations we have heard about today, it would cease to provide housing. The cap would be such short-termism—penny-wise, pound-foolish, as the saying goes. Therefore, although we welcome the Government’s decision to rethink, it is a shame that we have come to this point and I hope that the Minister will listen to what Members on both sides of the House have to say.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the right hon. Member for Newcastle upon Tyne East (Mr Brown) for introducing the debate, the importance of which is demonstrated, I think, by the attendance. It is unfortunate that Members’ speeches have been limited to two and a half minutes. There have been some excellent contributions—too many for me to list.
I start my comments by setting the wider context, using an holistic approach—a phrase that has been used. The Government’s entire housing strategy must be considered a mess, unless we assume that they want to dismantle the concept of social housing. The much trumpeted right-to-buy scheme and its extension to the properties of social landlords will reduce overall stock, and will be compounded by the forced council house sell-off to fund replacement housing. It is clear that the replacement houses will not be like for like, and they may be located in areas where there is less demand. All those factors combined will have an effect on housing associations’ finances. The ironic reality will be an increase in the overall housing benefit bill, as private rents increase and more properties end up on the buy-to-let market.
Another issue for the social rented sector is the 1% rent reduction, which, according to the Government’s figures, will take £10 billion out of the social housing market by 2021. That £10 billion loss will obviously reduce the chances of some supported accommodation being affordable within a wider model. It is incredible that the Government have proposed a cap on social sector housing benefit rates without thinking about the impact on supported accommodation. The measure is expected to save only half a billion pounds over this parliamentary term. When compared with the £8.5 billion cut in corporation tax and the £5.5 billion of capital gains and inheritance tax giveaways in the Budget, that half a billion pounds is a drop in the ocean. The Government have admitted that they do not have statistics on those who access supported housing and have belatedly agreed to an impact assessment, which shows real flaws in their sign-off process.
The one-year delay in implementation can only be cautiously welcomed, because such accommodation may still be at risk. To use the fall-back answer that discretionary housing payments can be used misses the point completely. It is the argument used in relation to the bedroom tax, and it is the argument that the Government lost in court. I repeat that the term “discretionary” means that the funding is uncertain. It is impossible to believe that DHP will plug all the gaps. My local authority has confirmed that the overall DHP budget will need to be increased, so there will not be any real savings if that is the way the Government go.
We have heard that lifeline services are at stake. Let us be clear about that. Supported housing can end years of hell for those suffering from domestic abuse. It can save lives, prevent rough sleeping, support people with mental health issues and allow older people to live independently in a safe environment. That in itself can lead to offset savings in the NHS or reduce the need for people to be in a more intense and expensive residential home. It can help prevent bed blocking in the NHS. The polar opposite of supported housing provision does not bear thinking about. We have heard that there could be increased health costs, increased crime and increased costs associated with imprisonment.
As a councillor, I was pleased to see the construction of a new development in Kilmarnock called Lily Hill Gardens. It provides supported accommodation for people with special needs, allowing independent living within the complex, subject to a 24-hour telecare package. That project was truly transformational for the tenants. I shudder to think what will happen if future projects cannot go ahead.
One of the caseworkers in my office previously worked for Women’s Aid. The circumstances in which some people live are frightening, and I pay tribute to the dedication of the support staff and acknowledge the risks that they face. How undervalued must they feel at this moment? Kilmarnock Women’s Aid was able to confirm that it provides information, support and temporary refuge accommodation to women, children and young people experiencing domestic abuse. The impact of benefit sanctions and reforms are already having a disproportionate effect on women and lone parents. Universal credit, which will be paid monthly to one householder, further increases the possibility of financial abuse.
If refuge services are not exempted from housing benefit, a vital lifeline for women and children who need to find safety from domestic abuse could be lost. We have heard about the financial impact estimated by Scottish Women’s Aid and the fact that the Inside Housing article estimates that 95% of services could be lost. The Government do not need an impact assessment. Those points prove that an extended exemption for supported accommodation is required.
It is a pleasure to have this debate under your chairmanship, Mr Hollobone. I thank my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) for securing this debate. There does seem to be cross-party support for and interest in this issue, because it affects every constituency. My right hon. Friend mentioned how it affects the north-east, as did my hon. Friend the Member for Easington (Grahame M. Morris). I was very interested in what the hon. Member for Peterborough (Mr Jackson) said about how different the situation is outside London. Local housing allowance in London is at a completely different level from what it is in some rural areas. That important point must not be forgotten.
Supported housing means that no one is left behind. It is what makes a civilised society. We have heard passionate speeches today about how in all areas, people will be affected in different ways. The majority of supported housing tenants depend on housing benefit to cover the cost of their housing. The proposed application of the local housing allowance rate in social housing would have a significant impact on the most vulnerable residents in all our communities. The decision is already having a devastating effect before it even comes into force: the building of thousands of vital supported homes has been delayed or scrapped altogether because of uncertainty over future funding.
The National Housing Federation estimates that 82,000 specialist homes will be forced to close. That is 41% of all specialist housing. Last Friday I visited Emmaus Greenwich along with my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook). It does a fantastic job. It does not just house people; it rebuilds lives. The introduction of the local housing allowance cap would mean a reduction of 40% of its housing benefit income, leading to a local shortfall of an estimated £86,000 a year. Nationally, Emmaus would lose around £3 million a year.
We have heard many passionate speeches today, and I would like to set out some questions for the Minister. We have the Housing Minister in front of us, but I understand that the decision is pretty much led by the Treasury and the Department for Work and Pensions, so he may not be able to answer the questions today. If he cannot, I ask him to commit to writing with the answers. Will he commit to working with the sector to try to understand the impact of the decision? Has he had conversations about that? There is some uncertainty. It has been mooted that only new tenancies will be affected. Does that mean new claimants, or does that mean new tenancies? If an existing claimant has to move from one property to another, does that mean that they then lose out? That clarification would be welcome.
Why is the evidence review into the decision not completed yet? It started in December 2014, I think, and should have been completed last year. It is still not complete. Is there a reason for that delay? When will the review be finished? Will the Minister announce a full exemption from the LHA cap for all tenants in supported housing? Has a cost-benefit analysis of the decision and the delay taken place? The impact of the decision has one cost and the impact of the delay has another.
Has anyone looked not only at demand now, but future demand? For instance, has there been any review of how many women applied for housing because of domestic violence, whether nationally or locally? Does the Minister know what the figure is for his constituency? We need to look at future demand. We are making decisions now when demand is growing.
Yesterday, a written response came back to a parliamentary question. The question was:
“To ask the Secretary of State for Work and Pensions, what estimate he has made of the number of disabled people living in social housing who will be affected by the cap to local housing allowance.”
The response was:
“The information requested is not available. As such it is not possible to accurately estimate the number of disabled people living in social housing that will be affected by this policy”.
How can we have a policy that is costed when we do not know how many people it affects?
The hon. Members for Waveney (Peter Aldous) and for Peterborough said that this is a cross-party and cross-agency issue. It will affect the NHS, the courts and the probation service, so it needs an in-depth look. David Orr, the chief executive of the National Housing Federation, is a man I do not agree with on everything, but he has said:
“This decision must be made and it must be made quickly.”
I agree, and I look forward to the Minister’s answers.
It is a pleasure to serve under your chairmanship, Mr Hollobone, in an important debate, which I have listened to with great interest. The hon. Member for Erith and Thamesmead (Teresa Pearce) outlined the level of interest in this issue, which I have been impressed by not just here today, but in previous debates in the main Chamber, where Members from all parts of the House have spoken. This debate has shown that Members care passionately about this issue. They have shown that here today and have spoken about it in conversations and debates previously. That is a good sign. I welcome the comments in support of some of the excellent work across the sector. We all share an enthusiasm and a commitment to sort out this important part of the housing market and to protect vulnerable people in the wider sense.
I want to outline for hon. Members some of the things that we are looking to do, so that we have the context. In our welfare reforms we are determined to ensure that we deliver a system that rewards hard work, that is fair to taxpayers as well as to claimants, and that always protects the most vulnerable. Yes, the welfare reforms we are introducing are wide-ranging. They need to look at all aspects of welfare spending, including housing benefit costs on supported housing, which are currently estimated to be running at more than £4 billion annually, and we need to be aware of that. Nevertheless, protecting the most vulnerable in society and supporting their housing needs is just as much a priority as driving down the deficit, and there need not be a contradiction between those two aims. In fact, as my hon. Friends the Members for Waveney (Peter Aldous) and for Peterborough (Mr Jackson) rightly pointed out, we should be looking to make a clean start and to get an holistic response.
On that point, with all respect to the Minister, may I point out that in Peterlee in my constituency the shelter for victims of domestic violence will close? That centre is full and over-subscribed. The figures suggest that every week two women are murdered by their partner or former partner. That must be a cause for concern when not only the Peterlee shelter but eight others across the north-east are apparently about to close.
I suggest that if the hon. Gentleman reads what was said when we had a longer debate on this subject in the main Chamber just a couple of months ago, he will see that we were very clear that we will make sure that the most vulnerable are protected. He is presupposing something that nobody has suggested is going to happen.
Look at our track record on supporting the most vulnerable. We have set aside more than £500 million to create a safety net against homelessness. We have increased funding for central programmes to reduce homelessness even further over the next four years. That funding will include a new national programme of millions of pounds to support and scale-up work on rough sleeping. On the specific subject that was just raised, we have pledged £40 million for domestic abuse services, ensuring that no victim is turned away from the support they need. At the autumn statement we announced £400 million to deliver thousands more specialist affordable homes for the vulnerable, the elderly and those with disabilities. The Department of Health has committed to fund up to 7,500 further specialised homes for disabled and older people.
We have spent around £50 billion every year on benefits to support people with disabilities or health conditions, and that spending will be higher than it was in 2010 in every year until 2020. Funding for supported housing is also part of the Government’s wider financial settlement to councils, which includes £5.3 billion in the better care fund, and will result in councils being better able to work together, across agencies, and to invest in early action to help people to live safely in their homes for longer, which, ultimately, is what most people want to be able to do.
We understand how vital it is that those living in supported accommodation and those who provide it receive appropriate protections. I pay tribute to the excellent providers, some of which have been mentioned this afternoon and many of which I have met in my travels around the country. Indeed, I was a trustee of a foyer some years ago. We all know of examples from our constituencies and around the country of excellent providers doing excellent things to make a real difference to the lives of vulnerable people. That is to be applauded. These organisations do vital work that shows the very best ways of supporting and helping vulnerable people.
While looking after the most vulnerable in society, we must also ensure that funding for supported housing is efficient, workable, transparent and sustainable, in order to provide a secure, quality service that delivers for those who need it and makes the best use of the money available. As the right hon. Member for Newcastle upon Tyne East (Mr Brown) outlined, my Department and the Department for Work and Pensions—this issue crosses Departments—have jointly commissioned an evidence review of the supported housing sector. That review will help us to shape the future based on the latest evidence of the current scope and scale of the supported housing sector. It has included extensive consultation with local authorities, supported housing commissioners and all types of supported housing providers, be they charities, housing associations or providers from the commercial sector.
The review will report shortly, and we will continue to work with and listen to the sector as part of developing a long-term, sustainable funding regime. In the past few weeks I have met David Orr and others and spoken to providers, and I will continue to do so because it is important that we develop a long-term, sustainable funding regime. It is really important that we get it right.
May I throw something else into the mix of the consultation? Because of the different statutory framework we have in Scotland for homeless accommodation, there is a greater need for private sector companies to fill supported accommodation roles in Scotland. The cuts directly impinge on such providers being able to fulfil Scotland’s statutory obligations. Will the Minister take that back as part of his consultation and consider making private accommodation specified accommodation, so that those who need to can claim discretionary housing benefit?
I will come back to the hon. Gentleman on that but, as I outlined, the report will be published shortly and we will then respond to it.
I want to put on the record how grateful I am, as are colleagues from across Government, for all the constructive engagement we have had from providers, local authorities, charities and service user groups. We want to continue to work collaboratively with stakeholders as we develop the sustainable future for supported housing that we all want to see. Based on the findings of the evidence review, my Department will be working closely with others across Government, as well as with representatives of service users, supported housing providers and partners, to develop options. The ambition remains to develop a system that is flexible, meets the needs of tenants and stimulates investment in the sector by creating certainty and clarity on future funding.
The sector has welcomed our decision to have the year-long deferral to ensure that the report can complete and we can feed back on it to give that certainty and confidence as we go forward with the final outline. As we made clear when we announced the deferral, the policy review will ensure appropriate protections for vulnerable people. We have done that, as is evidenced in our actions. The latest Homes and Communities Agency figures openly report that there have been 16,813 older people’s and supported housing completions under our affordable housing, and more than 2,000 starts and almost 1,000 completions have already been recorded under phase 1 of the Department of Health-funded care and support specialised housing programme.
We will always protect the most vulnerable in society and provide them with the support they need and a safe home to live in. We must also ensure that that is sustainable and that they have certainty for the future, which is why it is right that we let the report complete and be published. We will then respond to it as efficiently and quickly as we can to ensure certainty and confidence going forward.
Mr Hollobone, you have presided over a very disciplined debate with a clear purpose: to question the effectiveness of the policies the Government are pursuing and alert the Minister to what I hope are the unintended consequences of the policy as we understand it.
I thank my hon. Friends the Members for Easington (Grahame M. Morris), for York Central (Rachael Maskell), for Wirral West (Margaret Greenwood), for Dulwich and West Norwood (Helen Hayes) and for Brent Central (Dawn Butler) for expressing the Labour party’s point of view. I also thank the two Scottish National party Members who have taken part in this short debate, the hon. Members for Linlithgow and East Falkirk (Martyn Day) and for Kilmarnock and Loudoun (Alan Brown), the latter of whom spoke from the Front Bench. We all had essentially the same point to make: what is proposed is cruel, stupid and expensive.
Even the two Conservative Members who spoke, the hon. Members for Peterborough (Mr Jackson) and for Waveney (Peter Aldous), made the point—correctly—that this is a cross-departmental issue and it is wrong to try to tackle it by focusing only on the Department for Work and Pensions and the Department for Communities and Local Government. If things go wrong, the consequences will be far more broadly felt than at just those two Departments, with effects on the budgets of all sorts of other Departments—certainly including the Home Office and the Department of Health on top of the two I just mentioned.
The Minister gave us a partial answer on when the all-important report is expected: “March” and “spring” have now become “shortly”. I welcome that. I think we will be returning to this matter again when the report is in the public domain. There is still a question mark over what is to happen when universal credit is introduced. The Minister was not able to deal with that today, and I accept that he is a Minister at DCLG rather than DWP, but nevertheless it is a vital question, not only for those who rely on the provision but for those who are bidding for the contracts to make the provision. It is very difficult for the latter to bid for a contract without knowing what the funding arrangements will be post 2018.
Finally, I do not recognise the £4 billion figure that the Minister used at the start of his address. Perhaps I misheard him, but it sounded to me as though he said that supported housing costs £4 billion. I think a number of us will want to pursue that further. I thank everyone who participated in the debate, including the Minister. I can confidently say that we will be returning to this matter again.
Question put and agreed to.
That this House has considered the future funding of supported housing.